Correlation Between Hawaiian Holdings and China Southern
Can any of the company-specific risk be diversified away by investing in both Hawaiian Holdings and China Southern at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Hawaiian Holdings and China Southern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hawaiian Holdings and China Southern Airlines, you can compare the effects of market volatilities on Hawaiian Holdings and China Southern and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Hawaiian Holdings with a short position of China Southern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hawaiian Holdings and China Southern.
Diversification Opportunities for Hawaiian Holdings and China Southern
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hawaiian and China is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Hawaiian Holdings and China Southern Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Southern Airlines and Hawaiian Holdings is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Hawaiian Holdings are associated (or correlated) with China Southern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Southern Airlines has no effect on the direction of Hawaiian Holdings i.e., Hawaiian Holdings and China Southern go up and down completely randomly.
Pair Corralation between Hawaiian Holdings and China Southern
Allowing for the 90-day total investment horizon Hawaiian Holdings is expected to generate 3.93 times more return on investment than China Southern. However, Hawaiian Holdings is 3.93 times more volatile than China Southern Airlines. It trades about 0.02 of its potential returns per unit of risk. China Southern Airlines is currently generating about 0.07 per unit of risk. If you would invest 1,736 in Hawaiian Holdings on December 29, 2023 and sell it today you would lose (404.00) from holding Hawaiian Holdings or give up 23.27% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 41.41% |
Values | Daily Returns |
Hawaiian Holdings vs. China Southern Airlines
Performance |
Timeline |
Hawaiian Holdings |
China Southern Airlines |
Risk-Adjusted Performance
0 of 100
Low | High |
Very Weak
Hawaiian Holdings and China Southern Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hawaiian Holdings and China Southern
The main advantage of trading using opposite Hawaiian Holdings and China Southern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hawaiian Holdings position performs unexpectedly, China Southern can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in China Southern will offset losses from the drop in China Southern's long position.Hawaiian Holdings vs. Canadian Pacific Railway | Hawaiian Holdings vs. Daseke Inc | Hawaiian Holdings vs. Marten Transport | Hawaiian Holdings vs. Werner Enterprises |
China Southern vs. American Video Teleconferencing | China Southern vs. Summit Materials | China Southern vs. QRS Music Technologies | China Southern vs. Cementos Pacasmayo SAA |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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